Assessing the political and investment risk climate of the PRC : a SAB-Miller case study

[摘要] ENGLISH ABSTRACT: This research assignment has investigated the overall nature of theinvestment climate in the People's Republic of China (PRC).The investmentclimate was analysed using a Political Risk Analysis (PRA) framework,whereby the PRC was scrutinised closely for its most defining socioeconomicfeatures and, especially, for its most salient political risk factors.Based on this, the assignment evaluated this climate with specific relevanceto the investment plans of the South African company SAB-Miller.Since its accession to the World Trade Organisation (WTO)in 2001, the PRChas intensified its economic restructuring process, a necessary andinevitable process, in order to comply with the terms of the WTOframework.This period of adjustment has heightened the anxiety over the strength ofthe Chinese economy, and the repercussions and/or opportunities for themultinational SAB-Miller.To remedy this uncertainty, this assignment hasdrawn up an in-depth qualitative scenario, in order to forecast the majortrends of the PRC's short-term socio-political future. The main findings ofthe assignment indicate that a 'high-road' scenario is the most likely tooccur in the PRC in the short-term. Clearly, this favourable forecast 1Sdependent on the continuation of the current economic and socio-politicalrestructuring process in the PRC.With regards to the main macro-political risks factors, the assignment drawsattention to several critical areas of concern. Firstly, the lack oflegitimatisation from the 'bottom-up' is a worrying feature, especially in lightof the growing economic disparities between citizens and between provinces.Secondly, the financial and governmental sectors need a thoroughrestructuring, according to WTO criteria. Thirdly, the fragmentation of themarket inside the PRe undermines the potential of the PRC government todiffuse the benefits of economic growth and to absorb the downsides ofglobalisation. Micro-specific risk factors for the company SAB-Miller arefocussed predominantly on the speed and the depth of the implementation ofthe guidelines of the WTO. Especially with regards to the lowering of intra-provincial trade barriers and the efficacy of the distribution networks. Lastly,SAB-Miller should eliminate any risk factors, which may originate frominside the company's behaviour, such as the effects of its adopted labourpolicies. Lastly, it should maintain a clear level of transparency in theirassociations with governmental institutions. Throughout the assignment,these risk factors will be investigated and related to the overall political riskclimate and utilised to draw conclusions concerning the potential of theinvestment plans of SAB-Miller.

[发布机构] Stellenbosch University